CHICAGO -- When the company once known as PNC Financial Corp. got serious about unifying the myriad banks it had acquired, it made a corporate name change a priority.
The Pittsburgh-based company wanted to focus its marketing muscle on a single brand name and gain economies of scale in the purchase of advertising, forms, and signs.
Thus PNC Bank Corp. was created in September 1992, and the words "PNC Bank" were imposed over the former names of 10 subsidiaries inherited through takeovers.
The simple name change involved a multimillion-dollar decision, one that at the time appeared irrevocable. Anything belonging to PNC Bank Corp. would be called PNC Bank.
|Never Say Never'
Yet earlier this month, the nation's 10th-largest banking company said it planned to preserve the name of Massachusetts Co., the $1 billion-asset, Boston-based trust bank it had just acquired.
"You can never say never," said A. William Schenck 3d, head of retail banking at PNC.
In the case of the Massachusetts Co., he said, eradicating an acquired brand name would have cut niche marketing opportunities.
The incident highlights a persistent wrinkle in the consolidation of the banking industry. Despite years of determined efforts by acquirers to impose their styles and names on targets, competitive and geographic issues continue to obstruct moves toward complete standardization. Among the exceptions to the cookie-cutter name conversions:
* Boatmen's Bancshares, St. Louis, is operating in New Mexico and west Texas under the name Sunwest Financial Corp.., which it acquired this year.
* First Chicago Corp. pursues middle market companies on its home turf under the banner of American National Corp.
* San Francisco-based Bank-America Corp. operates in Washington state as Seafirst Corp.
Perhaps the most extreme example of acquirer shyness about imposing its name is Synovus Financial Corp., the Columbus, Ga. holding company. Synovus. has not imposed its Latinate name on any of its 32 member banks. Each preserves its original handle.
Delicate Decision
Bankers say their reluctance to tinker with monikers often springs from a desire to retain customers who are loyal to the old names. Other reasons are avoiding conversion costs and fostering local identity.
Indeed, some acquirers even promise name preservation in negotiating to win a merger bid.
The upshot? "A name change remains A delicate decision that should be re-evaluated with each acquisition, not imposed automatically," said David Martin, a managing director at Schecter Group, a New York-based consulting firm.
Massachusetts Co. is a good example of a company whose name carries considerable, weight among its customer base. It was founded in 1818 and counted Benjamin Franklin as a customer.
Says PNC's Mr. Schenck: "We can build on that name nationally with targeted consumer and trust clients."
Boatmen's officials expressed similar views about Sunwest, the largest banking company in New Mexico.
"The Sunwest name enjoyed huge recognition and goodwill," said Alfred S. Dominick. Jr., head of retail banking at Boatmen's. "How can you improve on that when you are not known in the marketplace?"
First Chicago
Geography is not the only factor affecting naming decisions.
For roughly 10 years, First Chicago has kept the American National name alive on its home turf, running separate ads and even publishing a separate annual report for the affiliate.
"The name was synonymous with middle-market banking when we bought the company in 1984, and our research shows that is still the case," said Leo F. Mullin, an executive vice president of First Chicago Corp. and chief executive of the business banking unit.
Preserving a local name can take on special importance in a troubled banking market if the acquisition target is not a tarnished property.
At a time when ailing Texas banks were being snatched up by interstate acquirers, for example, New York-based Chemical Banking Corp. retained the name Texas Commerce Bancshares for the company it bought in 1987.
By most accounts, preserving the name worked powerfully in luring customers from failed Texas banks that had been taken over by rival national players such as NationsBank Corp. and Banc One Corp.
At times, however, acquirers delay name conversions cause other issues take priority. dent and public relations official at New England's Shawmut National Corp., said his company was much more concerned with converting computer systems and branches than with a name change when it took over Connecticut National Corp. in 1988.
By the time attention turned to a name change, severe credit-quality problems had emerged in the region.
Connecticut National was not renamed Shawmut National until January.
In other instances, acquirers try to have it both ways by blending names. In Chicago, for the tactic even when it could not compete with larger banks on price.
"We offer to keep their name for three years, give their managers seats on our board, and retain more jobs," said Mr. McCullough.
The tactic worked in Meridican's recent acquisition of Commonwealth Bancshares, a $2.2 billion banking company in Williamsport, Pa., he said.
What's Appropriate
There are some occasions, of course. when a bank's name is inappropriate for the market it is entering. First Alabama Corp., for example. has not affixed its name to its acquired operations in Florida and Tennessee. And Boatmen's is not the ideal title for a bank operating in arid New Mexico.
Bank of New York Co. had a similar problem with its recent purchase of New Jersey's National Community Banks. It first considered keeping the acquired company's name. Then, it weighed a total overhaul of its own name, with the idea of advertising its expanding regional reach. Eventually, it opted to imprint its logo on the New Jersey bank, after ascertaining through focus groups that National Community's commuter-oriented customers were familiar with Bank of New York's name.
The problem of a narrow name is especially acute for a regional bank with national ambitions. That's what prompted the former NCNB Corp. to forsake its North Carolina National Bank name for NationsBank, after major acquisitons in Georgia. Texas, and Florida.
On the other hand, many supercommunity banks are anxious to preserve local identities.
Economies of Scale
Notwithstanding the many exceptions, the majority of acquirers probably will continue their practice of imposing a single. systemwide name.
John Russell, chief spokesman for Ohio-based Banc One Corp., said the $74 billion-asset company increasingly views itself as being a competitor with national financial firms such as Merrill Lynch & Co.
Banc One's marketing punch would be weakened, he says, if it tried to support a variety of subsidiary names.
Scale economies, also, are not to be sneezed at. Cleveland-based National City Corp. expects $1 million of annual savings on forms alone by converting its more than 600 offices in Ohio, Indiana, and Kentucky to a single name,
Name conversions "are not a black-and-white issue." said PNC's Mr. Schenck. Should the Pittsburgh company go far afield for another acquisition, he said, "We again would consider preserving name of the company we acquire."
